Spin-Offs and Their Impact on Shareholder Wealth: An Empirical Analysis on the German Capital Market

In times of a continuously expanding proliferation of investment and financing possibilities in the hands of banks, investment funds and individual capital investors, particular attention should be paid to the effects that new financial instruments are likely to have not only on concrete financing and investing modes but also on the further development of legal rules in this field. As the German capital market has been considered unable - at least until the widely marketed Deutsche Telekom IPO - to get rid of its persisting prejudice of being structurally lagging behind other countries’ systems, the legal treatment of emerging financial instruments deserves greatest attention. The rocket science of new financial instruments challenges law's aim to rightly assess the real quality of these instruments and to strike an adequate balance between the interests involved against a national policy background and EU demands. While the past few years have been a time of great legislative activity in the field of company and capital market law in Germany, only a closer look at court decisions reveals the true pressure resulting from a fast moving capital market on traditional legal perceptions. The so-called Aktienanleihe-Decision by the Federal Court of Justice, [FCJ] (Bundesgerichtshof - BGH) of 12 March 2002 marks an important step in the ongoing process of Germany's developing capital market law.

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Die effektive Durchsetzung kapitalmarktrechtlicher Ansprüche mittels Gruppenklage

10.5771/9783748921868 ◽

2020 ◽

Author(s):

Daniel Blagojevic

Keyword(s):

Collective Action ◽

Group Action ◽

Legal System ◽

Capital Market ◽

Class Action ◽

Eu Law ◽

Class Actions ◽

German Capital ◽

System P ◽

German Constitution

The dissertation examines how collective legal redress in the German capital market law must be structured in order to ensure the effective enforcement of the law by capital market investors. The dissertation analyses the provisions of the German Code of Civil Procedure (ZPO) and specific forms of collective action (group action (Verbandsklage), representative action (Musterklage) and class action (Gruppenklage)). Against the background of the German Constitution and relevant EU law, the author not only discusses various types of class actions both in Germany and certain foreign jurisdictions, but also presents his own effective model for class actions under the German legal system.

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Stock market reactions to layoff announcements – analysis of the renewable energy sector

International Journal of Energy Sector Management ◽

10.1108/ijesm-02-2016-0004 ◽

2017 ◽

Vol 11 (2) ◽

pp. 311-328 ◽

Cited By ~ 3

Author(s):

Stephan Kunert ◽

Dirk Schiereck ◽

Christopher Welkoborsky

Keyword(s):

Renewable Energy ◽

Stock Market ◽

Capital Market ◽

Abnormal Returns ◽

Shareholder Wealth ◽

Energy Sector ◽

Market Reactions ◽

Content Type ◽

The Public ◽

Stock Market Reactions

Purpose This study aims to analyze stock market reactions to layoff announcements in the renewable energy sector. The global renewable energy sector and most of the producers of wind and solar energy equipment are struggling. While changes in the regulation and in the promotion of energy production from renewable sources reduced the attractiveness of these technologies, many involved companies had to downsized their workforce to increase performance. The public often perceives these announcements as a way of increasing shareholder wealth at the cost of the employees. Support for this claim is often given in the form of isolated case study considerations. However, the case may be different for the renewable energy sector as changes in the overall institutional environment have sustainably deteriorated the prospects of this industry. Design/methodology/approach This study analyses stock market reactions of 65 layoff announcements made by companies in the renewable energy industry in the years from 2005 to 2014. The reactions are measured by cumulative abnormal returns, which are obtained by using the event study methodology. Findings It shows a significantly negative market reaction to the announcement of a layoff plan on the event day. The findings are generally in line with our expectations and underline the negative perspectives of the sector from a capital market point of view and the declining importance of the sector with respect to employment numbers. Originality/value The results of this study are important for investors when estimating the capital market reactions to layoff announcements and when they form their own expectations regarding possible future layoff announcements. For the public, the results are of interest as the prejudice, that layoff plans are used to increase shareholder wealth, can be dismantled. The opposite is shown.

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